Discussion Papers, Department of Business and Management Science, Norwegian School of Economics (NHH)
Sunspot Equilibria and the Transfer Paradox
() and Beate Pilgrim
Abstract: We show that for international economies with two
countries, in which agents have additively separable utility functions, the
existence of sunspot equilibria is equivalent to the occurrence of the
transfer paradox. This equivalence enables us to provide some new insights
on the relation of the existence of sunspot equilibria and the multiplicity
of spot market equilibria.
Keywords: Sunspot Equilibria; Transfer Paradox; (follow links to similar papers)
JEL-Codes: C62; D52; F20; F30; O12; (follow links to similar papers)
25 pages, November 22, 2004
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